Omani Firms to Avoid Double VAT on UAE Imports: Key Tax Relief for Business Growth in Oman
Muscat: The Oman Taxi Authority has issued an important clarification for Omani companies registered under Value Added Tax (VAT) concerning intraregional trade between Oman, the United Arab Emirates (UAE), and other Gulf countries implementing VAT.
Omani companies can avoid unnecessary VAT charges when purchasing goods from the UAE for the purpose of exporting these goods from the UAE and importing them into Oman by choosing one of two main options:
First Option: Supply for Export Purposes at 0% VAT
Omani companies should coordinate with their UAE suppliers to have the goods shipped directly to Oman as an "overseas supply export." In this scenario, VAT is not applied, and the transaction is classified as zero-rated (0% VAT), provided that export documentation, including the export declaration, is submitted according to UAE tax regulations.
Second Option: Business Visitor VAT Refund Form Service
If VAT is paid at the time of purchase, companies have two choices:
- The UAE supplier may issue a credit note to the Omani buyer, refunding the VAT after the export is validated with an export declaration showing the goods’ shipment to Oman.
- Alternatively, the Omani company can apply directly to the UAE Federal Tax Authority for a refund using the "Business Visitor VAT Refund Form," provided all service conditions are met and the Omani company does not have branches or a fixed establishment in the UAE.
This clarification is intended to simplify procedures, help companies avoid undue VAT expenses, and promote enhanced trade cooperation between Oman, the UAE, and other Gulf countries applying VAT.
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This VAT clarification offers Omani businesses a strategic opportunity to reduce unnecessary tax costs, enhancing cross-border trade efficiency with the UAE and Gulf countries. Smart investors and entrepreneurs should leverage these VAT-compliant options to optimize supply chains and improve cash flow, while closely monitoring compliance requirements to mitigate any fiscal risks. This move signals a push for stronger regional trade integration, presenting a fertile ground for growth and collaboration.
